Memory: Beyond Flash and DRAM

January 20, 2004

If any type of semiconductor gets no respect, it may be the lowly memory chip. It's true that DRAMs and flash memory -- the two chips that store most information in computers and electronic products -- have been at the top of the chip best-seller list for years. But from a performance standpoint, they've been unable to keep pace with the turbocharged microprocessors that they're supposed to work in concert with. The resulting imbalance has prevented PCs from performing as well as they should, that is, as fast as they could run if only memory chips were up to the task.

Even so, the recent emergence of more chip-hungry consumer products means that for memory, a new day has begun. Take the cell phone. The memory capacity in an average handset that stores photos as well as contacts and the like should double this year vs. 2003, according to tech consultancy IDC. With their fancy features and flat screens, new digital TVs already contain nearly as much memory as low-end notebook PCs, figures Tai Nguyen, an analyst with Susquehanna Financial Group in San Francisco -- and sales of these brainy boob tubes are rising about 50% a year.

Consequently, worldwide sales of DRAM (dynamic random-access memory) and flash memory combined should grow about 40% this year, to $40 billion, according to chip researcher IC Insights in Scottsdale, Ariz.

BETTER ALTERNATIVES. Problem is, if electronics are to keeping wowing consumers, they'll need faster, cheaper memory that will fit in smaller packages -- and nothing on the market quite fills that bill. DRAM is cheap and quickly reads and writes data. But it "forgets" data whenever its host's power is turned off, and it has to be replenished with electric current -- a major drawback for mobile devices.

Flash memory, which is prevalent in cell phones, retains data even when the power is turned off. But it's two to six times as expensive as DRAM, estimates Nguyen. And it's slow, which makes a pain of such tasks as saving photos on a cell phone.

So both the PC industry and consumer-electronics giants such as Sony (SNE) are pressing chipmakers for better alternatives. "The holy grail is to combine the benefits of DRAM and flash" for one low price, says Ivan Greenberg, director of strategic marketing for No. 1 memory maker Samsung Semiconductor.

"MORE VARIETY." The surprising news is that such chips might arrive sooner than later. Leading memory makers such as Samsung, Micron (MU), Infineon (IFX) and Hynix in DRAM, and flash heavyweights Samsung, Toshiba, Intel (INTC), and an AMD (AMD)-Fujitsu joint venture, have been ramping up spending on research and development. In fact, experts think memory is likely to get a heftier chunk than usual of the $20 billion Merrill Lynch expects chipmakers to spend on R&D this year.

Already, there's "a lot more variety [in memory chips] than there has ever been," says Brian Matas, an analyst with semiconductor consultancy IC Insights. In 2003, Toshiba introduced its XDR (extreme data rate) DRAM, which it claims to be the fastest memory chip in the world. And late last year, Toshiba and many other memory companies sent their customers samples of new chips.

A key focus for the giants in the business is improving the way existing chips work. Starting later this year, they'll provide an interface feature for new PCs called DDR II (for double data rate), which will allow for 25% faster communication between the controller -- an intermediary between the microprocessor and the memory chip -- and the memory itself. Among other things, this should permit PCs to show faster and sharper graphics, says Dean McCarron, co-founder of processor consultancy Mercury Research in Cave Creek, Ariz.

TO THE DUSTBIN? Chipmakers are also working to improve DRAM and flash. Micron is developing a method for putting more memory onto a chip by stacking its components rather than arranging them side-by-side, says Mark Durcan, chief technical officer at the largest DRAM maker in the U.S. And Intel is attempting to reengineer insulators that stand guard at flash memory's door to let saved data in and out. Today, the insulators are so impenetrable that they slow the chip's read and write speed. Thus, Intel is experimenting with more subtle insulating material, says Stefan Lai, vice-president for technology and manufacturing.

Even so, many analysts think DRAM and flash could be history in 5 to 10 years, replaced by chips with fewer inherent limitations.

One contender with potential is called ferro-electric random access memory. Developed by Ramtron (RMTR), Samsung, and several other players, it's both faster than today's flash memory and remembers information even when it isn't powered, thanks to its use of exotic materials such as lead-zirconium-titanate. The material is so good at preventing leaks of data and electricity that the chip remembers data even when a computer isn't plugged in.

WAKE-UP TIME. Today, such memory can store only small amounts of information and is costly to produce. Still, ferro-electric RAM should be ready for prime time within two years, says Samsung's Greenberg, who adds that it might show up first in portable products such as advanced cell phones.

Another promising technology, being developed by players like IBM (IBM), Motorola (MOT), and Samsung, is called magnetic RAM (MRAM). Devices with MRAM, which could appear in products like PCs in the next four years, don't need to be turned off. When not in use, they'll simply fall asleep and stop consuming energy, ready to be awakened at the push of a button instead of via a time-consuming boot-up process. MRAM's secret is that it uses magnetic forces rather than an electrical charge to store data.

Intel, Samsung, and others are also working on phase change RAM (P-RAM) -- also called ovonic memory -- which can process data up to 100 times faster than flash, says Intel's Lai, while at the same time retaining it for easy retrieval. The chip also can be written to about 1 trillion times before it needs replacing vs. 1 million times for flash, Lai says. That's because it's made of the same material as a rewritable DVD.

The problem with ovonic chips -- as for most of the new memory now in development -- is that, today, they cost several times what it takes to make than DRAM and flash. So now, Intel is researching new materials that could change that -- and launch ovonic memory into the mass market.

FURTHER OUT THERE. Work is also progressing on more revolutionary advances -- nanocrystal, molecular, and organic memory -- that have been the subjects of experiments for years. IBM recently figured out a way to grow nanocrystals with huge data-storage capacity on top of base elements of traditional silicon chips in a way that ensures consistent output of data, says Ruud Tromp, Big Blue's manager of molecular assemblies and devices. Next, IBM needs to reduce costs for the memory to go commercial.

Looking to take a different route, some startups are jumping into molecular memory, which uses specially designed molecules attached to integrated circuits to store data. Privately held ZettaCore in Denver is already producing laboratory versions of molecular memory that it claims is equivalent to today's fastest DRAM. It costs one-fifth to one-half as much to manufacture as regular chips, says Randolph Levine, Zettacore president and CEO, because the molecules can simply be sprayed onto the base material, eliminating several costly manufacturing steps. Levine says ZettaCore plans to commercialize the technology within two years for use in everything from PCs to mobile devices.

Memory chips are even taking a cue from biology with the development of organic memory, so named because it uses organic substances to store information. If experiments by IBM and other companies pan out, within a decade organic memory could be sprayed, like ink, onto such mundane materials as paper business cards that could be inserted into a special readers on a variety of devices. Such chips would be much cheaper to produce than today's crystal and silicon variety, Tromp adds. The one drawback is that those chips might not last long, since organic materials decompose.

CELL-PHONE HARD DRIVES. Meantime, an alternative is appearing for handling amounts of data (such as photos) so huge that they overwhelm even tomorrow's memory chips: removable storage, which for the most part is made by many companies that aren't part of the traditional memory business. Agere (AGR.A

, AGR.B) is working on chips that, within two or three years, would let device makers introduce tiny removable hard drives for cell phones that would use so little power it would allow the handset to have a week of standby time without a recharge, says John Harris, storage division strategic marketing manager at Agere. More power-efficient hard drives, which are already on the market for devices including laptops and MP3 music players, will become available in cell phones in the next year.

Whatever technologies appear next, they'll have to ride a declining price curve, notes Shane Rau, an analyst with tech consultancy IDC. Indeed, manufacturing costs for traditional DRAMs and flash are dropping at a double-digit annual rate, as chipmakers move production to 300-mm wafers, or silicon plates, instead of the 200-mm wafers that have been common. The bigger size allows for greater yields and lower costs.

The advance of new technology could actually be delayed for a bit by strong demand for existing memory products, says Susquehanna's Nguyen. Both DRAMs and flash memory will be in short supply for most of this year, he adds. So they'll get first priority when chipmakers set manufacturing plans.

Even so, customer demand for better memory won't abate. Startups are beginning to deliver on advanced technologies, and the chip industry's leaders won't be far behind. Sometime later this decade, memory may emerge from its role as the technology that time forgot. By Olga Kharif in Portland, Ore.